JERUSALEM (Reuters) -- Britain is considering recalling its ambassador to Israel to protest at Prime Minister Benjamin Netanyahu's decision to expand settlement building, a diplomatic source said on Monday.
Israel's Haaretz newspaper reported that France was also considering withdrawing its envoy, and the two countries were coordinating discussions over a number of punitive steps.

The government gave a green light to zoning and planning in the area known as E1 between Jerusalem and Ma’aleh Adumim, but not to actual construction there, Prime Minister Binyamin Netanyahu clarified to his Likud ministers Sunday as condemnations of the move continued to pour into Israel from around the world.

As Israel announced that it was withholding tax payments to the Palestinian Authority on Sunday, an Israeli official told Al-Monitor that Israel considers its 2009 understanding with the Americans that it would not build in the sensitive E1 zone of East Jerusalem “no longer relevant.”

JERUSALEM -- Israel said Sunday it would withhold more than $100 million in tax revenue this month from the cash-strapped Palestinian Authority, the latest reaction to last week's U.N. vote recognizing the Palestinian territories as a "nonmember observer state."

RAMALLAH, West Bank — “Now we have become a state!” Mahmoud Abbas, the president of the Palestinian Authority, announced Sunday to a crowd of thousands in the courtyard of his headquarters in this Palestinian city.

The recent conflict between Israel and Hamas significantly recontextualised the request by the Palestine Liberation Organisation (PLO) for an upgrade from the United Nations General Assembly to "non-member observer state" status. How all parties react to the upgrade will have a significant effect on the balance of power within Palestinian society, and strongly influence future regional developments.

Palestinian President Mahmoud Abbas will certainly never admit it, but he owes a huge thank you to the Israeli government, especially Foreign Minister Avigdor Lieberman. Only a few days ago, it seemed Abbas might disappear from the Palestinian and international consciousness due to Hamas' achievements during Israel's Operation Pillar of Defense.